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Board of Regents Ran SDIBI/EB-5 on Fire-and-Forget Mode

A fellow researcher asked the South Dakota Board of Regents for documents relating to the creation of the South Dakota International Business Institute, the entity that ran South Dakota's suspect EB-5 program as an administrative unit of Northern State University from 1994 to 2009, when director Joop Bollen finagled the state into formally privatizing that immigrant investor program.

The Regents' rather remarkable response is that they can find only two documents pertaining to SDIBI in their files, the agenda and minutes of the May 5-6, 1994, Board of Regents meeting in Vermillion at which the Regents replaced the International Business Center with the SDIBI. The Regents called Northern and got hold of six more documents:

  1. NSU's proposal to authorize SDIBI, which includes a proposed budget of $54,000, including $38,000 for salary and $2,500 for travel;
  2. a mission statement;
  3. a 1994 grant proposal seeking $79,578 from the U.S. Department of Education for SDIBI;
  4. a 2000 grant proposal seeking $89,969 from the USDoE for SDIBI;
  5. two undated abstracts indicating that NSU was seeking USDoE money to expand SDIBI services. Neither abstract's dollar figures match the figures in the grant application forms presented.

You can view that rather thin packet of documents here. Note that, perhaps oddly, the packet does not include any of the 2008 correspondence between NSU and the Legislature's Government Operations and Audit Committee.

SDIBI evolved to be South Dakota's EB-5 visa recruiter and broker. SDIBI distributed millions of dollars of foreign money to South Dakota dairies and other businesses. Yet the state agency that authorized and, one would logically conclude, supervised SDIBI for fifteen years can only produce eight pieces of paper concerning SDIBI. Not one of these meager papers mentions EB-5. Every one of these papers is prospective, not evaluative. These papers tell us what SDIBI said it would do, but none show SDIBI reporting regularly to Northern or the Regents what SDIBI actually did.

So whatever Joop Bollen was doing in SDIBI, Northern State and the Board of Regents don't appear to have paid much attention, until they looked up from their desks years later and realized they were carrying a budget line item that wasn't doing much to promote academic objectives. In their final description of SDIBI's functions, in their accounting of FY 2011 budget cuts, the Regents said that the SDIBI director "assists State and Federal agencies in enhancing international trade and investment. This was to be accomplished by developing and implementing international trade services for South Dakota in a manner that optimizes return on investment."

That closing job description seems to be a far cry from the academic services the Regents thought they were investing in when they authorized SDIBI in 1994. And that's what happens when a state agency doesn't pay attention to how its subordinate agencies spend their money.


  1. Jim 2013.12.15

    When Benda arranged for the 1 mill future fund money for "construction and equipment", he must have known he was going to pay himself 450k. Some have suggested pre payment of those fees are common in these large projects, which I believe is true. One question I have is why didn't he get paid out of the 59 mil eb5 had already paid NBP? I suspect he saw the project failing and knew NBP maybe unable to pay him, so he had to concoct this request for "construction and equipment" costs, which the state readily signed off on. Which brings one back around to the question: how much of the 59 mil did the SDRC already take in fees? And how was the request for the 1 mil made and sold? Without mr benda, this we may never fully know. It would also seem that if the future fund money was not eb5 money, the state would have jurisdiction to investigate that aspect this mess.

  2. Rick 2013.12.15

    Exactly why an independent forensic audit of GOED and related agencies is critically important. Nobody will get a credible answer until all the information involved with this case becomes fully transparent and corroborated by more than the servants of the GOP State Central Committee.

  3. John 2013.12.15

    Exactly why an independent 3d party audit and investigation of all principles, boards, and agencies involved in this fiasco must occur sooner rather than later. These calls for audits and the investigations are not personal to Benda, Rounds, Duagaard, Jackley, Bollen, etc., rather they are only about getting to the quality of government we deserve, expect, and apparently have to demand.

    It appears to a casual observer the South Dakota government experienced systemic failures in the offices of governor, economic development, attorney general, board of regents, and among legislative leaders. Little wonder the apparent reaction of the state government is to circle the wagons rather than create a government where we citizens are able to, "trust, but verify."

  4. Roger Cornelius 2013.12.15

    So, I wonder how the Regents feel about being used by a grifter.

  5. Lanny V Stricherz 2013.12.15

    What about items 3 and 4 listed in this article and possibly 5, at a time when the federal government was hemorraghing money like it was water? This was about the time when the whole country was screaming about the "bridge to nowhere." It sounds like the bridge to someone's back pocket.

  6. caheidelberger Post author | 2013.12.16

    Lanny, you're going to complicate things! You touch on an issue that goes beyond the authorization of EB-5 money (which, in a generous mood, I might say is a wonderful trick, getting foreigners to foot the bill for local economic development, avoiding any chance of increasing our own deficits) to the broader issue of how South Dakota depends on other people's money to stay afloat.

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